Dun & Bradstreet Will Face Charges Over Credit Ratings

A federal district court says Dun & Bradstreet Corp. must face charges of aggressive sales tactics in a lawsuit led by a small Seattle-based construction firm.

In a ruling earlier this month, Judge Thomas S. Zilly of the Western District of Washington denied a motion by the Short Hills, N.J., credit-report giant to dismiss the suit, which was initially filed in December 2012 by O&R Construction, a licensed general contractor.

In previous court filings, O&R co-owner Robyn Kolaitis claimed a bad credit report by D&B led Home Depot Inc. to lower its credit line by $8,000. The report described O&R as slow to pay its bills and in “severe risk” of failure, claims Ms. Kolaitis says are false.

To restore her company’s credit profile, Ms. Kolaitis says she paid more than $1,000 for a year of monthly services by Dun & Bradstreet Credibility Corp., a Los Angeles, Calif., firm that was spun off of Dun & Bradstreet Corp. in 2010.

D&B Credibility, which is also named in the lawsuit, charges businesses for credit-management services and tools, such as CreditBuilder, which promise to monitor and build business credit.

D&B, a 150-year-old firm that collects credit data on millions of businesses through public records, supplier payment information and other sources, has denied any involvement with D&B Credibility, calling it is a separate legal entity.

“When confronted by affected businesses, D&B refuses to identify the sources” of information, instead directing them to D&B Credibility’s tools and services to fix the problem “at a cost,” O&R’s lawyer, Jack Landskroner, said in a statement issued Tuesday.

The suit claims D&B spun off its credit-management division in 2010 after receiving numerous complaints from business owners, yet it continues to profit from the business through annual royalties charged to D&B Credibility.

Both D&B Corp. and D&B Credibility declined to comment on the case.

It remains unclear how soon the suit will go to trial because the judge has yet to grant class-action status. That process is likely to take months and be opposed by the defendants, according to one person familiar with the situation.

Credit reporting agencies like these have extremely limited information and are rarely accurate in my opinion. A large portion of our business is from overseas, most others do not report to D&B, Equifax, or others. So, D&B sells our company credit report information based on 38 payment experiences for a company with over 8 million in gross sales. We have several hundred vendors - many large ones of which require to be paid in 30 days or less. Yet, according to D&B, we are facing severe financial difficulties and likely to go out of business in the next 12 months. They ask for business references, then call the references to sell them a credit reporting package. They try to sell us a credit builder package for $1,000 or more per year per credit reporting agency. The data on our company that is being sold as current is 12-14 years old. Very little of it was current. In my opinion, these agencies border on negligence, fraud, and extortion. I really hope someone puts that opinion to test in court very soon. If not, we are very tempted. Just trying to get these companies to correct incorrect, out of date, or faulty information is almost impossible.

3:00 pm April 3, 2015

wizard wrote:

I'm a small business owner. D&B, Experian, Equifax, Transunion practices are all like extortion to me. Individuals and businesses should have the right to completely free access to their rredit reports AND scores at all times, no just once a year. This is ridiculous. And credit reporting companies should be held liable for erroneous information.

3:30 pm April 17, 2014

cigarman wrote:

We received a call from D&B wanting credit info for one of our customers (a "mutual customer"). I told her that I didn't see she a member of our credit reporting service, but I'd be happy to give her the information for $29.95, and that I just needed her credit card information - she says "but we're D&B," which I promptly replied that they sell the information we would provide, and it's a two-way street, and that we could put them on a unlimited plan for a higher price... then click.